United States

US equity markets began July with mixed performance as investors rotated out of technology stocks and shifted focus toward small- and mid-cap companies. The Dow Jones Industrial Average and the broader Russell 2000 Index both advanced over 0.90%, while the Nasdaq Composite declined 0.82% to close at 20,202. The S&P 500 ended the session slightly lower, down 7 points or 0.11%, finishing at 6,198.

Investor sentiment was influenced by the passage of the U.S. administration’s tax and spending bill through the Senate by a narrow 51-50 margin, with Vice President Vance casting the tie-breaking vote. The bill must now return to the House for final approval due to significant amendments from the original version.

Leading technology names faced profit-taking, with Nvidia falling 2.97% and Meta retreating 2.56% to close at $719.22. The pullback was largely attributed to portfolio rebalancing and risk management following outsized gains in AI-related stocks over the past month, which had concentrated exposure in that theme.

Tesla also declined sharply, down 5.34%, as tensions flared once again between President Trump and CEO Elon Musk. Trump suggested on social media that the Department of Government Efficiency (DOGE) should investigate the subsidies Musk’s companies receive from the government.

Sector rotation was evident in the S&P 500, with the strongest gains recorded in healthcare and materials. The materials sector was led by paper and packaging stocks, which surged 4.92%, while healthcare rose 1.39%, supported by strong performances from UnitedHealth and Amgen.

Economic data released during the session showed that manufacturing activity edged slightly higher in May, but remained in contraction, with the PMI reading at 49.5. The report cited continued weakness in the housing market, subdued consumer spending, and rising concerns over potential job losses.

Speaking in Europe, Federal Reserve Chair Jerome Powell noted that interest rates in the U.S. would likely be lower were it not for the inflationary pressures expected from new tariffs. Meanwhile, the JOLTS report revealed an unexpected increase in job openings, but a decline in actual hires—signalling caution among employers.

In fixed income markets, U.S. Treasury yields edged higher, with the 10-year yield rising 1 basis points to 4.24%. The U.S. dollar held steady, slipping just 0.06% on the Bloomberg Dollar Index, and remains near multi-year lows.

Europe

European equity markets closed lower as uncertainty surrounding ongoing trade negotiations weighed on investor sentiment. The Euro Stoxx 600 dipped 0.21% to finish at 540.25. According to Bloomberg, the European Union is open to a proposed universal 10% tariff regime put forward by the United States but is seeking concessions on certain key sectors. With the current tariff exemption deadline set for July 9, U.S. President Trump stated he is not considering an extension—intensifying pressure on negotiations.

In contrast, UK equities ended the day slightly higher. The FTSE 100 rose 0.28% to close at 8,785, driven by a 2.79% gain in AstraZeneca shares. The pharmaceutical giant rallied on reports that its CEO is considering moving the company’s primary listing to the United States.

On the economic front, Eurozone inflation rose by 0.1% in May, bringing the annual rate to 2.0%—in line with the European Central Bank’s (ECB) target. Further supporting the view that inflation remains contained, the ECB’s long-term consumer price index (CPI) expectations came in lower than forecast, with three-year inflation expectations now at 2.4%.

Bond yields declined across the region, with Germany’s 10-year bund yield falling 3 basis points to 2.57%. In the UK, the 10-year gilt yield dropped 4 basis points to 4.45%.

*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.

Commodities   

Copper prices climbed to a three-month high after Chinese manufacturing data signalled a rebound in industrial activity. The Caixin Manufacturing PMI rose to 50.4 in June, up from 48.5 in May, indicating expansion. This private sector reading contrasted with the official government PMI released a day earlier. The stronger data lifted copper on the London Metal Exchange by US$65, or 0.65%, closing at US$9,934.

In contrast, iron ore prices declined, falling 0.58% to US$93.60. Traders viewed the improved PMI data as a signal that Chinese authorities may delay additional domestic stimulus, seeing sufficient momentum in the economy for now.

Oil prices continued to trade within a tight range, edging higher to start the month. West Texas Intermediate (WTI) rose 0.52% to US$65.45, while Brent crude gained US$0.44 to settle at US$67.18. Markets remain in a holding pattern as traders await developments on trade talks—particularly between the U.S., China, and India—as well as upcoming OPEC+ output decisions and summer demand signals from major consumer markets.

Gold advanced 1.08%, gaining US$35 to reach US$3,338. The rally was supported by a weaker U.S. dollar and renewed safe-haven demand following the passage of the U.S. tax bill, which is expected to widen fiscal deficits. Concerns over increased government borrowing and higher bond issuance drove investors toward gold as a defensive asset.

Bitcoin declined in line with broader weakness in the tech space, dropping 1.5% to US$105,933.

Economic Calendar

US:

• Challenger Job Cuts (Jun)
• ADP Employment Report (Jun)